Malaysia Airlines incurred a record nett loss of RM2.52 billion for their 2011 financial year, the largest in it's history. The company is now in "crisis" declared Ahmad Jauhari Yahya, the CEO of Malaysia airlines.
I expected that Malaysia Airlines to be in the "red" for 2011 F/Y but not at such a huge figure. The last quarter performance was the worst registered a massive loss of RM1.28 billion which was about as much as the first 3 quarters combined. It was unbelievable that they fared so badly in the last quarter despite the peak season of School holidays, X'mas and year end!
Ahmad Jauhari blamed the increase in fuel prices as the major cause of the huge losses.
Do you believe that they lost RM2.52 billion when the airline carried a total of 13.3million passengers achieving a healthy load factor of 75% in 2011 F/Y? Something is very wrong somewhere!
Take a look at Singapore Airlines 2010/2011 F/Y result. They carried 16.6 million passengers registering a load factor of 78.5% and they achieved a nett profit of SGD1.012 billion!
How could Malaysia Airlines lose so much money? Perhaps, the owners should do an audit to find out the actual cause for such a big plunder. Was it because of the controversial share-swap deal between key shareholders of Malaysia Airlines and AirAsia?
One of the reasons could be, spending without a budget, like paying RM18 million for for this QPR Jersey belonging to the shareholders of AirAsia.
Paying too much for catering uplift?
Overcharged by suppliers? It was revealed in Parliament not so long ago that "Nasi lemak" was supplied to Malaysia Airlines at RM150 per set.
When asked on the recovery plan, Ahmad Jauhari said that immediate action plans include strengthening the airline’s balance sheet, winning back customers by introducing branded customer experiences and more aggressive marketing, relentless cost focus and launching its new regional airline by the middle of the year.
I am not sure if the recovery plan will work if they continue to spend unnecessarily. One of them is employing highly paid so called foreign experts who do not even know about the Malaysian culture.
Malaysia Airlines has been in the market for so many donkey years. Any new marketing strategy may not help as Malaysia Airlines has already a very good reputation in the local and world market. Ahmad Jauhari should emphasis more on "cost cutting" exercise. Look into the staff cost, fuel cost and most important of all, the suppliers cost. He should not waste more money to set-up or launch a new regional airline but go for the huge lucrative low cost market by bringing back Firefly to serve East and West Malaysia including some regional routes.
May God help Malaysia Airlines.
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